AB(ATVI) - 2021 Q3 - Quarterly Report

Financial Performance - Total net revenues for the three months ended September 30, 2021, were $2,070 million, an increase of 5.9% compared to$ 1,954 million in the same period of 2020[13]. - Total net revenues for the nine months ended September 30, 2021, were $5,626 million, an increase from$ 5,198 million in the same period of 2020, representing a growth of 8.2%[72]. - Consolidated net revenues for Q3 2021 increased 6% to $2.1 billion compared to$ 2.0 billion in Q3 2020[160]. - Consolidated net revenues for the nine months ended September 30, 2021, increased 17% to $6.6 billion compared to$ 5.7 billion in 2020[160]. - The total segment net revenues for the three months ended September 30, 2021, were $1,880 million, an increase from$ 1,767 million in the same period of 2020, representing a growth of 6.4%[81]. Revenue Breakdown - In-game, subscription, and other revenues reached $1,647 million for the three months ended September 30, 2021, up from$ 1,546 million in the prior year, reflecting a growth of 6.5%[13]. - Digital online channels generated $1,852 million in net revenues for the three months ended September 30, 2021, compared to$ 1,753 million in the same period of 2020, marking an increase of 5.6%[79]. - Segment net revenues for Activision, Blizzard, and King were $5.87 billion for the nine months ended September 30, 2021, reflecting a 62% decrease[93]. - For the three months ended September 30, 2021, Activision generated net revenues of$ 641 million, Blizzard $493 million, and King$ 652 million, totaling $1.786 billion[197]. Earnings and Income - Operating income for the three months ended September 30, 2021, was$ 824 million, representing a 5.9% increase from $778 million in the same period of 2020[13]. - Net income for the three months ended September 30, 2021, was$ 639 million, compared to $604 million in the same period of 2020, marking an increase of 5.8%[17]. - Basic earnings per common share for the three months ended September 30, 2021, were$ 0.82, compared to $0.78 for the same period in 2020[135]. - Diluted earnings per share for Q3 2021 increased 5% to$ 0.82 compared to $0.78 in Q3 2020[160]. Assets and Liabilities - Total assets increased to$ 23,977 million as of September 30, 2021, up from $23,109 million at December 31, 2020, representing a growth of approximately 3.76%[11]. - Total current liabilities decreased to$ 2,016 million from $3,100 million, reflecting a reduction of approximately 34.97%[11]. - The company reported a total shareholders' equity of$ 16,950 million, an increase from $15,037 million, representing a growth of approximately 12.69%[11]. - Long-term debt remained relatively stable at$ 3,607 million, slightly up from $3,605 million[11]. Cash Flow and Investments - The company reported a net cash provided by operating activities of$ 1,753 million for the nine months ended September 30, 2021, compared to $1,112 million in the same period of 2020, representing a growth of 57.7%[19]. - Cash and cash equivalents rose to$ 9,718 million, compared to $8,647 million at the end of 2020, indicating an increase of about 12.37%[11]. - The company had$ 1.5 billion available under a revolving credit facility, which has not been drawn upon[60]. Deferred Revenues - Deferred revenues decreased significantly to $844 million from$ 1,689 million, a decline of about 50%[11]. - The aggregate amount of deferred revenues was $0.9 billion, down from$ 1.7 billion as of December 31, 2020[58]. - The change in deferred revenues for the nine months ended September 30, 2021, was $(773) million, compared to$ (306) million in the same period of 2020, indicating a significant increase in deferred revenue[82]. Stock and Dividends - The company has authorized a stock repurchase program of up to $4 billion, effective from February 14, 2021, with no shares repurchased as of September 30, 2021[138]. - A cash dividend of$ 0.47 per common share was declared on February 4, 2021, with a total payment of $365 million made on May 6, 2021[140]. Restructuring and Costs - The total restructuring and related costs incurred through September 30, 2021, amounted to$ 267 million, with $180 million attributed to Activision,$ 50 million to Blizzard, and $37 million to King[120][123]. - The company does not expect significant net savings in total operating expenses due to the restructuring plan, as cost reductions will be offset by increased investment in product development[121]. Market and Competition - The company continues to face risks related to competition and market dynamics, particularly in the context of the ongoing COVID-19 pandemic[6]. - The company experienced increased competition for talent, affecting its ability to deliver future game releases[180].